1. A 10-year zero-coupon bond has par value of $1000 earns a 10% effective annual rate of interest. What is the purchase price of the bond? How much is it worth after 4 years if the prevailing interest is 8%?
2. For the tenth-to-last, annual coupon payment (9 left after payment), 70% of the coupon goes to interest and $12 goes to principal. If the yield to maturity is 5%, and the bond matures for $1000, what is the book value of the bond after this coupon?